腾盛博药-B(02137) - 2024 - 中期业绩

Performance Summary Financial Summary The company's cash and equivalents decreased by 6.9% from the beginning of the year, with loss for the period expanding due to fair value losses on financial assets, partially offset by reduced R&D and administrative expenses Key Financial Indicators for H1 2024 | Indicator | H1 2024 | H1 2023 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Cash and Equivalents (End of Period) | RMB 2.478 billion | - | -6.9% (vs. Beginning of Year) | | Other Income | RMB 70.9 million | RMB 85.9 million | -17.5% | | R&D Expenses | RMB 126 million | RMB 202 million | -37.6% | | Administrative Expenses | RMB 78.6 million | RMB 103 million | -23.5% | | Loss for the Period | RMB 283 million | RMB 197 million | +43.9% | - The increase in loss was primarily attributed to RMB 115 million in other losses from fair value changes of financial assets, partially offset by reduced R&D and administrative expenses[3] - The significant decrease in R&D and administrative expenses resulted from the company's pipeline prioritization and organizational optimization during the reporting period, effectively controlling third-party contract costs and employee costs[2][3] Business Summary The company strategically focused on HBV functional cure projects, advancing combination therapies with three clinical-stage HBV projects receiving China CDE Breakthrough Therapy Designation, while also seeking external partnerships for non-core projects - The core strategy is to advance HBV functional cure projects, having obtained China CDE IND approval to conduct Phase 2 studies in mainland China evaluating combination regimens of elebsiran, BRII-179, and PEG-IFNα[4] - The company's three clinical-stage HBV drug candidates, elebsiran (BRII-835), tobevibart (BRII-877), and BRII-179, have all received CDE Breakthrough Therapy Designation[4] - For non-HBV projects (such as HIV, MDR/XDR, CNS), the company is actively seeking external collaborations and has submitted an IND application to CDE for the MDR project BRII-693[4] Consolidated Financial Statements Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the company's loss for the period expanded significantly, primarily driven by a substantial shift in net other gains and losses from a gain to a loss, despite reductions in R&D and administrative expenses Condensed Consolidated Statement of Profit or Loss (RMB in thousands) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | – | 617 | | Other Income | 70,879 | 85,863 | | Net Other Gains and Losses | (115,374) | 23,326 | | R&D Expenses | (126,169) | (202,175) | | Administrative Expenses | (78,629) | (102,823) | | Loss for the Period | (283,238) | (196,826) | | Loss for the Period Attributable to Owners of the Company | (280,535) | (189,917) | | Loss Per Share (RMB) | (0.38) | (0.26) | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company maintained a stable financial position with substantial total and net assets, supported by significant net current assets and cash balances, providing ample funding for ongoing R&D activities with low total liabilities Condensed Consolidated Statement of Financial Position (RMB in thousands) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 337,255 | 415,473 | | Current Assets | 2,559,350 | 2,782,778 | | Of which: Cash and Deposits | 2,460,000 (Estimated) | 2,661,400 | | Total Assets | 2,896,605 | 3,198,251 | | Current Liabilities | 67,695 | 125,869 | | Non-current Liabilities | 18,617 | – | | Total Liabilities | 86,312 | 125,869 | | Net Assets | 2,810,293 | 3,072,382 | Management Discussion and Analysis Overview The company's strategic focus is on the HBV functional cure program, advancing multiple late-stage combination therapies with three candidates receiving China CDE Breakthrough Therapy Designation, and expects no impact from recent partner restructuring - The core strategy is the HBV functional cure program, aiming to bring meaningful therapeutic impact to patients in China and globally[23] - Three leading HBV drug candidates (elebsiran, tobevibart, and BRII-179) have all received Breakthrough Therapy Designation from China's National Medical Products Administration (CDE)[23] - The company presented direct evidence for the first time, demonstrating that immune responses induced by HBV therapeutic vaccines are associated with HBsAg reduction and viral control in chronic HBV infected individuals, providing key information for late-stage clinical trials[23] Product Pipeline Summary The company has established a pipeline of 10 innovative product candidates, primarily focusing on HBV functional cure projects in Phase 2 clinical trials for the China market, alongside other projects in infectious and central nervous system diseases Key Pipeline Product Progress | Indication | Project | Development Stage | Rights Scope | | :--- | :--- | :--- | :--- | | Hepatitis B (Therapeutic) | BRII-179 | Phase 2 Clinical | Global | | | Elebsiran (BRII-835) | Phase 2 Clinical | Greater China | | | Tobevibart (BRII-877) | Phase 2 Clinical | Greater China | | HIV Infection | BRII-732 / BRII-753 | Phase 1 Clinical / Pre-clinical | Global | | MDR/XDR Infection | BRII-693 | IND Application Stage | Global | | Postpartum Depression | BRII-296 | Phase 2 Clinical | Global | Business Review During the reporting period, the company strategically increased investment in core HBV projects, advancing clinical trials and presenting key data, while actively seeking external collaborations for non-core projects to concentrate resources on HBV functional cure breakthroughs Core Pipeline Highlights and Future Milestones HBV projects achieved key advancements, with Elebsiran and Tobevibart receiving CDE Breakthrough Therapy Designation, new BRII-179 data showing robust immune responses, and future production supply secured, with key data from multiple combination therapy studies expected in Q4 2024 - Elebsiran & Tobevibart: Received CDE Breakthrough Therapy Designation; data from SOLSTICE and MARCH Part B studies are expected in Q4 2024; preliminary results from the ENSURE study are also expected in Q4 2024[28][29] - BRII-179: Data presented at the 2024 EASL™ Congress showed that BRII-179 in combination therapy can induce B-cell and T-cell responses associated with antiviral effects, improving HBsAg clearance rates[30] - The company entered into an agreement with VBI in February 2024 to acquire the intellectual property and related manufacturing facilities for BRII-179, ensuring supply for future clinical studies[30] Other Clinical and Pre-clinical Updates The company is actively seeking external collaborations for several non-core pipeline projects, including the MDR/XDR project BRII-693 which submitted an IND in China, and HIV and CNS projects that are also seeking partners for continued development - MDR/XDR (BRII-693): An IND application for a Phase 1 PK bridging study was submitted in China in July 2024 to support global Phase 3 trials[31] - HIV (BRII-753/BRII-732): Actively seeking development partners[32][33] - CNS (BRII-296/BRII-297): Phase 2 (PPD) and Phase 1 (Anxiety/Depression) studies have been completed, and partners are being sought for subsequent development[34] Research and Development The company views R&D as a core competency, focusing on infectious and CNS diseases through in-house development and strategic collaborations, leveraging its experienced team and cross-border capabilities to accelerate clinical development - For the six months ended June 30, 2024, the company's R&D expenses amounted to RMB 126 million[36] - The company employs a multi-pronged strategy combining in-house and collaborative R&D, leveraging its teams and partners in China and the US to accelerate clinical development[36] Commercialization As a clinical-stage biotechnology company, the current core focus is advancing the drug candidate pipeline, with no product sales or commercialization revenue expected in the short term, and commercialization strategies will be evaluated as the pipeline matures to maximize market potential - Most of the company's projects are still in clinical development, and sales or commercialization of drug candidates are not expected in the short term[36] Future Development The company will continue to focus on HBV functional cure, leveraging trial data with partner Vir to improve cure rates and planning confirmatory clinical studies, while optimizing resources for other projects through external collaborations and expanding the pipeline via in-house R&D and strategic licensing for sustainable growth - Core Strategy: Continue to focus on HBV functional cure, advance combination therapies to the next development stage, and develop cost-effective manufacturing and supply chain plans[37] - Resource Optimization: Seek development collaborations for non-core projects, allowing the company to focus more on core HBV projects[37] - Long-term Growth: Expand the pipeline through in-house R&D and strategic licensing opportunities (in-licensing and out-licensing), and refine early-stage development strategies[37] Financial Review Revenue For the six months ended June 30, 2024, the company's revenue decreased to zero from RMB 0.6 million in the prior year, primarily due to the termination of COVID-19 related projects - Due to the termination of COVID-19 projects, the company's revenue for H1 2024 decreased to zero from RMB 0.6 million in the prior year[39] Other Income Other income for H1 2024 was RMB 70.9 million, a 17.5% year-over-year decrease, primarily due to a RMB 17.3 million reduction in recognized government grants, while bank interest income slightly increased Other Income Details (RMB in thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Government Grants | 22,155 | 39,480 | | Bank Interest Income | 48,724 | 46,383 | | Total | 70,879 | 85,863 | Other Gains and Losses Other gains and losses significantly deteriorated, shifting from a RMB 23.3 million gain in the prior year to a RMB 115 million loss in H1 2024, a RMB 139 million change, primarily due to fair value losses on financial assets - Other gains and losses shifted from a RMB 23.3 million gain in H1 2023 to a RMB 115 million loss in H1 2024, primarily due to fair value losses on financial assets[40] Research and Development Expenses R&D expenses for H1 2024 were RMB 126 million, a significant 37.6% year-over-year decrease, primarily due to the company's strategic prioritization of HBV functional cure projects and organizational optimization, leading to reductions of RMB 36.6 million in third-party contract costs and RMB 36.4 million in employee costs R&D Expenses Details (RMB in thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Third-Party Contract Costs | 72,081 | 108,720 | | Employee Costs | 52,902 | 89,295 | | Others | 1,186 | 4,160 | | Total | 126,169 | 202,175 | Administrative Expenses Administrative expenses for H1 2024 were RMB 78.6 million, a 23.5% year-over-year decrease, primarily benefiting from reduced employee costs of RMB 21.7 million due to organizational optimization Administrative Expenses Details (RMB in thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Employee Costs | 43,345 | 65,016 | | Professional Fees | 16,741 | 16,133 | | Others | 18,543 | 21,674 | | Total | 78,629 | 102,823 | Liquidity and Capital Resources As of June 30, 2024, the company's total bank and cash balances (including restricted bank balances, time deposits, and cash equivalents) were RMB 2.478 billion, a decrease from RMB 2.661 billion at the end of 2023, primarily used for daily operations and R&D activities - As of June 30, 2024, total bank and cash balances were RMB 2.478 billion, a decrease of RMB 183 million from the beginning of the year[44] Non-IFRS Measures To better assess operating performance, the company disclosed non-IFRS adjusted loss, which, after excluding non-cash items like share-based payment expenses, amounted to an adjusted loss of RMB 280 million for H1 2024, compared to RMB 164 million in the prior year Reconciliation of Adjusted Loss (RMB in thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss for the Period | (283,238) | (196,826) | | Add: Share-based Payment Expenses | 3,139 | 33,126 | | Adjusted Loss for the Period | (280,099) | (163,700) | Key Financial Ratios As of June 30, 2024, the company's current ratio significantly increased to 3,781%, reflecting strong short-term solvency, primarily due to reduced other payables from payments of most third-party contract costs, while the debt-to-asset ratio is not meaningful as interest-bearing borrowings are lower than cash Key Financial Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 3,781% | 2,211% | | Debt-to-Asset Ratio | Not Meaningful | Not Meaningful | Debt As of June 30, 2024, the company's debt level was extremely low, with no bank borrowings, significant pledges, or other similar debts apart from RMB 17.8 million in bills payable, and no contingent liabilities or pledged assets - Apart from RMB 17.8 million in bills payable, the Group has no bank financing, loans, or other similar debts[48] - As of June 30, 2024, the Group had no contingent liabilities or pledged assets[49][52] Other Information Employees and Remuneration As of June 30, 2024, the company had 95 employees, with 66% (63 individuals) in R&D, and total remuneration costs for H1 2024 were RMB 96.2 million, a significant decrease from RMB 155 million in the prior year, reflecting the effectiveness of organizational optimization - As of June 30, 2024, the company had 95 employees, with R&D personnel accounting for 66%[54] - Total remuneration costs for H1 2024 were RMB 96.2 million, a significant decrease from RMB 155 million in the prior year[54] Use of Proceeds from Global Offering The company listed in July 2021, with net proceeds of approximately HKD 2.614 billion. As of June 30, 2024, HKD 1.422 billion has been cumulatively utilized, with HKD 1.192 billion remaining unutilized. During the reporting period, HKD 152 million was utilized, primarily for HBV functional cure projects (HKD 90.3 million) and CNS projects (HKD 40.4 million), with remaining funds expected to be fully utilized by the end of 2027 Summary of Use of Proceeds (As of June 30, 2024) | Item | Net Allocated Amount (HKD in millions) | Cumulative Utilized (HKD in millions) | Unutilized Amount (HKD in millions) | | :--- | :--- | :--- | :--- | | Total | 2,613.8 | 1,422.3 | 1,191.5 | | For HBV Functional Cure Projects | 994.1 | 589.6 | 404.5 | | For CNS Projects | 496.3 | 276.9 | 219.4 | | For MDR/XDR Infection Projects | 294.0 | 60.8 | 233.2 | | For HIV Projects | 176.0 | 150.4 | 25.6 | Corporate Governance and Compliance During the reporting period, the company complied with most corporate governance code provisions, with a deviation where the roles of Chairman and CEO are held by the same individual (Dr. Zhi Hong), which the Board believes benefits management and strategic execution; interim results were reviewed by external auditor Deloitte and the Audit and Risk Committee, and no interim dividend was declared - The company did not declare an interim dividend for the six months ended June 30, 2024[58] - The company deviated from the corporate governance code where the roles of Chairman and CEO are held by Dr. Zhi Hong, which the Board believes benefits the Group's management and strategic execution[58] - The interim financial statements have been reviewed by external auditor Deloitte Touche Tohmatsu and by the Board's Audit and Risk Committee[61]